When Daktronics (NASDAQ:DAKT) reports earnings, it should do it on a huge stadium screen. It's not only the company's principal line of business, but it would also be appropriate for the results it's showing off.

The maker of public display systems like high-definition scoreboards, electronic billboards, and traffic information displays reported $0.35 of earnings per diluted share for the fourth quarter of fiscal 2006, leaving the average analyst prediction of $0.28 a comfortable 25% behind it. That brings total 2006 EPS up to $1.04, again well above the expected $0.97. The stock price reflected the positive news, jumping 7.9%.

Daktronics was once a Motley Fool Stock Advisor selection, handpicked by fearless leader Tom Gardner and seemingly destined for greatness. But times got tough, competition increased, margins compressed, and cash flow of all kinds was disappearing. After three successive quarters of these negative trends, Tom decided that enough was enough, that this company had already seen its best days. In June 2005, Daktronics was cut loose from the newsletter at a price of around $22 per share.

As it turns out, the negatives were about to turn positive. After a slow summer, screen sales picked up steam and the competitive pressures seemed to deflate. Both the fundamentals and the stock price have been steadily improving since early last fall. Competitors like traffic safety experts Quixote (NASDAQ:QUIX) and broad-line display maker Trans-Lux (AMEX:TLX) haven't been able to keep up with Daktronics, and the company's focus on high-end, high-margin products is paying dividends now.

I mean that literally -- Daktronics announced its first-ever annual dividend of $0.10 per share in July 2005, and just yesterday upped it to $0.12. The stock sits at over $46 as I'm writing this, and it looks like our Tom could have benefited from some more patience with what looked like a dog a year ago. It's another example of how buying and holding for the long term often beats market timing.

I don't mean to knock Tom -- his reasoning for dropping the recommendation was solid, and despite market-thumping evidence to the contrary, he doesn't own a palantir that lets him see the future. Still, Warren Buffett says he'd be better off if he had never sold a share of stock in his life, and Daktronics is certainly making that philosophy look good right now.

Related links:

Daktronics used to be a Motley Fool Stock Advisor selection. Check out Tom Gardner's reasoning behind picking the company, and then why he let it go. All you need is a free 30-day trial .

Fool contributor Anders Bylund wants a 142' screen in his backyard like the one Daktronics is installing for the Miami Dolphins. It's great for entertaining. He owns none of the stocks discussed today, and the Foolish disclosure policy would require him to tell you if he did.